PIA Press Release2006/10/25

Strong peso, lower interest give RP P17.2 billion savings

Bacolod City (25 October) -- The Bureau of National Treasury has reported a savings of P17.2 billion in interest payment from January to September this year due to rallying peso and lower interest rates.

National Treasurer Omar Cruz said that an improved financial condition, which strengthened the country's position in the market, has reduced cost of maturing domestic foreign debts.

'The market is putting very little premium on our borrowings and is giving us a lot of discount, " he said.

Records from the National Treasury showed an interest payment allotment of P271.7 billion was prepared for January to September this year but only P252.5 billion was spent.

A surprisingly strong peso has lessened the government's financial responsibility for maturing foreign currency-denominated debts while a reduced interest on treasury bills and bonds reduced the cost of government borrowings.

Government fiscal managers have assumed a P54 to P56 peso-dollar exchange rate. Surging peso, however, dangled at P49 levels last September and again this month-October. (PIA-LOL) [top]